Compliance|Corporate Governance|Basic CSR|SECOM: SECOM CO., LTD. provides crime-prevention, security, and home security -Providing society with trusted peace of mind-

Compliance

Compliance with laws, regulations and the Articles of Incorporation has been an indispensable requirement of our business, and we have always sought to operate in strict adherence to this spirit. Accordingly, compliance is a part of daily routines at SECOM, and since our founding, we have engaged in organizational operation which places the highest priority on compliance.

Compliance at SECOM

In order to establish a Security services business, the objective of which is to protect the lives and assets of our customers from legal violations or malfeasance by third parties, SECOM recognizes that it is essential to obey the Japanese Constitution and related laws, as well as to comply with the spirit of the law.

A major feature of the Security services business is that the employees who provide services are in the position of regulating others. Accordingly, employees in the position of regulating others must also restrain themselves and obey the law, as well as the spirit thereof, while executing their duties with sincerity. This is how we earn the trust of our customers, which serves as the foundation of the Security services business. Therefore, as part of our basic policy, SECOM constantly strives to systematically ensure that each employee engages in thorough compliance with the law and the spirit thereof, which helps us earn the trust of many customers and has led to our growth until today.

Ensuring compliance in business activities

Basic policy of the SECOM Group for compliance

Historical background and path leading until today

SECOM was established in 1962 as Japan’s first security services provider. In order to establish a security services business, the objective of which is to protect the lives and assets of our customers from legal violations or malfeasance by third parties, it has been essential for SECOM since our founding to obey the Japanese Constitution and related laws, as well as to comply with the spirit of the law.

There are examples in which the response of field employees to customers has improved the reputation of a company. However, a major feature of the security services business is that the employees who provide services are in the position of regulating others.

Consequently, it goes without saying that field employees in the position of regulating others must also discipline themselves and obey the law, as well as the spirit thereof, while executing their duties with sincerity. This self-discipline is essential to obtaining the trust of customers which serves as the foundation of the security services business.

For that reason, as a part of our basic policy, SECOM constantly strives to systematically ensure that each employee engages in thorough compliance with the law and the spirit thereof.

Specifically, we have created an employee handbook which summarizes the appropriate attitude as a SECOM employee and the rules for behavioral criteria. The rules in this handbook are even stricter than the general provisions of the law, and are formulated so that all employees can feel pride in their work. We require all executives and employees to always keep the handbook together with their ID cards at work, and as the core of organizational management, we strive to link these rules with activities at our company to ensure thorough implementation of rules.

In recent years, the globalization of Japanese society and the changes in social structure have created the need for new laws and the strong demand to engage in compliance. As explained above, SECOM has engaged in organizational operation that prioritizes compliance since our founding.

“SECOM Group Code of Employee Conduct”

The appropriate attitude and behavioral criteria as a SECOM employee summarized in the employee handbook were formulated in accordance with the basic philosophy defined at the time of SECOM’s founding. Together with “The SECOM’s (Ten) Principles” and “The Constitutions of SECOM's Business and Operation,” the content of the handbook is universal and appropriate for any era from the perspective of compliance. However, with the expansion of our business and the need of clear understanding among all positions and all employees within the Group, on December 1, 2006, we added specific supplementary information including response to new laws and changed the name of the employee handbook to establish the “SECOM Group Code of Employee Conduct.”

While the original employee handbook served as a moral support for all SECOM employees, the attitude as SECOM Group employees and ways of thinking with regards to compliance, as the base of our business, are thoroughly promoted with the “SECOM Group Code of Employee Conduct”.

In addition, the “SECOM Group Code of Employee Conduct” clearly defines specific behavioral criteria and corporate ethics which must be followed by executives and employees during relationships with stakeholders such as the community, customers, or suppliers. To support these criteria and ethics, we have also defined a code of conduct related to cutting off relationships with anti-social forces, prohibiting corruption and bribery, and complying with related laws.

For example, our code of conduct includes: “employees must not engage in personal transactions or money lending with customers or business partners,” “employees must not accept personal gifts from customers or business partners,”“employees must constantly maintain healthy and transparent relationships with government agencies or political organizations, and must never engage in any behavior which may generates misunderstanding in regards to bribery,” and “employees must maintain moderation and dignity when providing gifts to customers, and must keep gifts within the appropriate scope to prevent any unnecessary understandings.”

Management system for promotion and implementation of compliance at the SECOM Group

Compliance is an indispensable requirement in the core of all business activities provided by the SECOM Group. Thus, the SECOM Group believes that the management system for promotion and implementation of compliance should not be the sole responsibility of dedicated departments or staff. Each and every employee follows our code of conduct and corporate ethics, including compliance.

Compliance is closely linked with every organization in the SECOM Group and forms the basis of our employee’s daily work. SECOM Group employees perform their work based on the “SECOM Group Code of Employee Conduct.” Even if supervisors are in charge of one subordinate, they are responsible for guiding and overseeing the employee in following the Code, which means that every organization in the SECOM Group follows the structure in which each responsible individual ensures the operation and implementation of the Code of Conduct. Each section is overseen by the responsible Executive Officers and the President and Representative Director has jurisdiction over the entire company.

The “SECOM Group Code of Employee Conduct” and the duty of the Executive Officers

The “SECOM Group Code of Employee Conduct” includes compliance and is an indispensable requirement in the core of all business activities provided by the SECOM Group. The management system for promotion and implementation of the Code has a significant impact on the improvement of performance in each section that Executive Officers supervise.

Therefore, as the head of each organization, each Executive Officer must assume responsibility for managing the promotion and implementation of the “SECOM Group Code of Employee Conduct” within her or his organization.

In regards to compliance, managers in the organizational chain who are responsible for managing the implementation of the “SECOM Group Code of Employee Conduct” bear the responsibilities for compliance, as a matter of course, but the Executive Officer in charge of the section also bears responsibility.

In other words, the Executive Officers in charge of each area are responsible for having a thorough knowledge, particularly of laws and regulations related to their field, and at the time when any revision of laws and regulations are made, they are responsible for considering appropriate response including revision of the “SECOM Group Code of Employee Conduct” and making proposals to the President and Representative Director. The Legal Affairs Department and other relevant departments may support them as necessary.

Role of internal audit departments

Following the orders from the President and Representative Director, duties of the internal audit departments (Audit & Compliance Department and Group Governance Department) include inspecting each organization and division of SECOM CO., LTD. and its subsidiaries, recommending compliance with the “SECOM Group Code of Employee Conduct” (including compliance) to improve morale, and providing guidance for items requiring correction. The results of inspection are reported to the President and Representative Director and other relevant Executive Officers.

Furthermore, when reports and consultations are received from SECOM Group employees through the whistle-blowing system that is explained below, the internal audit departments make reports immediately to the relevant Executive Officers. While giving top priority to preventing any disadvantage to the whistle-blower, the necessary investigations are conducted in accordance with methods decided upon by the Executive Officers.

As a matter of course, in regards to important issues, direct instructions must be asked from the President and Representative Director and other relevant Executive Officers, and reports must be made to Audit & Supervisory Board members from the internal audit departments.

Whistle-blowing system

The “SECOM Group Code of Employee Conduct” requires SECOM Group employees to report to the appropriate supervisor upon discovering that an employee, an executive, or an official at a subcontractor is attempting to engage or has engaged in an action that will cause the company to lose the trust of society, including violation of the code. For cases in which it is difficult to make a report to the supervisor for some reason, we have established the whistle-blowing systems for the SECOM Group employees; the Hot Helpline, to report to the Audit & Compliance Department, and the Group Head Office Helpline, to report to the Group Governance Department.

The whistle-blower’s name and the contents of the report are kept confidential. As long as the whistle-blower made the report in good faith, the whistle-blower will not suffer any disadvantage, even if the contents of the report differ from actual conditions.

According on the results of investigations, the relevant Executive Officers are obligated to immediately take corrective measures and find a solution. In accordance with instructions from the Executive Officer, the staff in charge of the investigations notify the whistle-blower of the contents and results of the investigation confidentially.

Organizational Culture Committee

Unless constant effort is made to improve and strengthen, the corporate organization will inevitably deteriorate. An important criterion for assessing the state of an organization is the organizational culture of the company.

The Organizational Culture Committee was established as a standing committee chaired by the President and Representative Director, in order to achieve further growth of the SECOM Group. The Committee holds meetings periodically or as necessary following orders from the President and Representative Director, and examines important organizational culture-related issues and determines important official commendations and punishments.

Also, in regards to the status of implementation for the “SECOM Group Code of Employee Conduct” (including compliance), the Organizational Culture Committee deliberates on items reported to the President and Representative Director from the Audit and Compliance Department and the Executive Officer in charge. If necessary, the Committee examines proposals for reviewing the management system for the implementation of compliance and proposals for revising the “SECOM Group Code of Employee Conduct” made by Executive Officers.

Any changes to the “SECOM Group Code of Employee Conduct” and the management system for implementation thereof must be deliberated by the Organizational Culture Committee and resolved at the meeting of the Board of Directors at SECOM CO., LTD., having received opinions from members of the Audit & Supervisory Board.

Global compliance training

To ensure our ability to provide globally the same sublime level of service as we do in Japan, it is important for each employee not only to perform business in accordance with manuals and rules, but also to work based on an understanding of the way of thinking behind “why I should do this.” For that reason, SECOM’s Philosophy, which defines the basic concept and principles of conduct, and the “SECOM Group Code of Employee Conduct,” which defines employee attitude and behavioral criteria, are translated into multiple different languages in order to advance awareness thereof.

Additionally, senior management of overseas group companies and employees from Japan taking up overseas postings are provided with a variety of compliance training on topics such as legal compliance, prevention of bribes, and internal controls.

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